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Retail Mix at World of Titan

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Submitted to Prof. Subramanium

Submitted by Hitesh Goyal

Batch PGPRM-9

Word count 4110

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ACKNOWLEDGEMENT

At the outset, we would like to thank Titan (Corporate office) for giving us an approval to do this

project.

We thank our company guide, Mr.Shashank (Visual Merchandising Head), Titan for their

encouragement and contribution of time, counsel and materials.

We thank Mr. Subramanium Faculty Guide for giving us the excellent guidance and helping us

to make the project practically a feasible one.

We would like to convey our special thanks to all the Faculty members of BMA Bangalore and

Mr. Krishnamurthy (Titan Retail, Head) and Mr. Sandeep (Tanishq retail, Head) of Titan for

their valuable help during our project.

We would also thank franchisor owner of Garuda mall Titan showroom Mr. Nagaraj and store

manager Mr. Krishna for their permission to carry out survey inside the store with their

customers.

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Table of Contents

Executive Summary:......................................................................................................................................4

INTRODUCTION:........................................................................................................................................5

BACKGROUND OF TITAN:.......................................................................................................................5

Business Philosophy:.....................................................................................................................................6

Product Catalogue and Pricing Strategy:.......................................................................................................6

PRICING OBJECTIVES:..............................................................................................................................9

Merchandising planning and visual merchandising:....................................................................................11

Safety and health policy:..............................................................................................................................13

Expansion plan:............................................................................................................................................13

RECOMMENDATIONS:............................................................................................................................14

BIBLIOGRAPHY:.......................................................................................................................................16

Annexure......................................................................................................................................................17

Store design: Mixed floor plan....................................................................................................................19

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Executive Summary:

1. THE AREA OF STUDY:

The study is about Titan Store in organized retail industry. The area of study is a vast one and hence an organization has been chosen as a sample to make it more specific.

2. THE TARGET OF STUDY:

The study targets the impact of Retail Mix such as visual merchandising, pricing strategy,

merchandising planning, store design, expansion plan and quality management towards visual

display of showrooms. It targets the ability of it affecting the purchase decision.

3. THE OBJECTIVES OF THE STUDY:

a. What is the Business Philosophy of Titan?

b. How Titan categories their product?

c. What is its pricing strategy?

d. What is the concept behind visual merchandising and store design?

e. How important is visual merchandising in organized retail business?

f. The structure of visual merchandising in Titan.

g. Visual merchandise role in Titan industry.

h. Safety and health policies provided by Titan

i. Expansion Plan and Break Even

j. Quality Management

4. METHODOLOGY:

a. The methodology used in carrying out this report writing is by collecting data and text

related to study from secondary sources (books and internet sites) from credible and

known textbooks and internet sites.

b. Semi-structured personal interview with the Head of VM of Titan and survey from

customers using closed ended questionnaires.

c. Analyzing the degree of relation therefore with available data.

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INTRODUCTION:

Retail industry is become one of the fastest growing sectors in Indian economy over the last few

years. Though India has largest density of retail outlet in the world, the sector is highly

fragmented and is in nascent stage. Organized retail industry is very less in India, it accounts to

only 5% of total retail business. However with the development of malls and other retail

organized establishment in the metros and other towns (tier II & tier III cities) of India, the

organized sector is looking attractive and experiencing growth. The organized retail sector is

expected to grow 25 to 30 % annually. Store designing, pricing strategy and Visual

Merchandising have become one very important aspects of retailing business. This technique

helps the retailer display the merchandise in an appealing and self explanatory way. Visual

Merchandising is the dressing up of the products and the store in simple words. A retailer has

various collections of products in various sections and presenting them effectively for customer

visual makes business easier.

Titan Industries is the worlds fifth largest and India's leading manufacturer of watches. Today,

the Titan portfolio has over 60% of the domestic market share in the organized watch market.

The company has 273 exclusive showrooms christened World of Titan', making it amongst the

largest chains in its category backed by 700 after sales service centres. The company has a

world-class design studio that constantly invents new trends in wrist watches.

BACKGROUND OF TITAN:

Back in early eighties Tata group entered the watch segment with Xerxes Desai to lead the team

of this consumer durable goods segment. Visual merchandising and store layout were very much

at the stage of "decoration" if any, and neither the brands nor the retailers saw it as important.

The watch store was narrow and not designed properly and the location basically was in

traditional markets of the city. Their weren’t excusive showrooms, company preferred to sell

through wholesalers

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Business Philosophy:

Evolution of Titan: Xerxes Desai's vision was to dramatically alter this perception of

consumers, and make Titan a fashion accessory. He knew that that was the only way that this

new brand would explode the market and wrest control from the dominant HMT. Technology

change: Accuracy of time and technology was changed lot to sell the product.

Various products: Titan expanded from 200 models to 350 models for customer to choose

from.

Styling was basic: Company decided to make watch segment also a lifestyle by making different

unique styles for its watch.

Shops were dark, dingy and uninteresting – “There was no importance given to presentation,

and therefore no attempt made at it. Titan brought in the concept of retailing into the watch

market, established a network of fine showrooms which would later become the world's largest

network of exclusive watch stores. These stores not only helped Titan to gain leadership

substantially, but also irrevocably altered the retail landscape of the watch market through a

demonstration effect on the traditional dealers”

Advertising: Company saw this is an important tool of creating sales and brand and from day

one it is been on toes and been advertising its product.

Titan has 60% share of total organized retail share market in watch segment and is doing very

impressive in its style, sales, innovation & promotion. Company has improved version of sales

force and service network which is wide and deep and has 270 exclusive showrooms throughout

country. Today “The World of Titan is the most prestigious and visible retail brands in the

country.”

Product Catalogue and Pricing Strategy:

If we talk about verity and assortment at Titan store, it has huge product categories for every

income level of customer. They have huge verity and in verity they have huge assortment. In the

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same way Titan prices its products according to its target market. It has different pricing strategy

such as combo pack where Titan offers two pair of watches at some discount, they also use

seasonal discount, offers for pricing strategy. Some of their product catalogue, pricing strategy

and segment according to target market:

FAST TRACK: A collection of watches will contemporary styles that are young and distinctive.

The woman’s collection presents the all new international `Frosted’ look, which is trendy and

chic. The Fast Track collection has elements like cool mesh straps and features that include EL

back-light and dual time. It also presents a range of fashion digitals in contemporary wrist

hugging cases with oversized displays and features that include countdown timers, chronographs,

lap timers, hourly chime, alarm and Hi-light glow.

Price: Rs.550-4000

Category aimed at: Youth.

EXACTA: A perfect combination of dateless styling and design simplicity, Exacta is the all-

steel look in Titan. Everyday watches for those who value fundamental principles of durability,

reliability and affordability.

Price: Rs.595-1,140

Category aimed at: Lower Middle Class (Office Wear)

SPECTRA: A truly unique collection of watches that combines the sturdiness of steel with the

richness of gold.

Price: Rs.650-1830

Category aimed at: Common Class

ROYALE: A stunning collection of alluring gold-plated cases matched with exquisite gold-

plated straps, the `Royale’ collection has designs that suit everyday wear.

Price: Rs.960-2,830

Category aimed at: Upper Middle Class

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RAGA: It is a exclusive watches for women. The Raga and Silver Raga collection is elegant,

delicate and feminine with each piece being truly unique. It is an existing collection that includes

decorative motifs, `Kadas’, studded bracelets and a first of its kind three-in-one watch. The

designs are inspired by traditional Indian as well as contemporary motifs and are expressed in

ropes, `kadas’ and ornamental bracelets. Crafted exclusively for the sophisticated woman, who

wears silver jewellery with élan, the Silver Raga makes a perfect accessory that completes a

woman’s wardrobe.

Price: Rs.1420-4,000

Category aimed at: Upper Class

BANDHAN: Watches for him and her. The pair watches of the `Bandhan’ range are Titan’s

tribute to the everlasting quality of a bond between a man and woman The Bandhan Collection is

available in both leather straps and gold bracelets and its presented in uniquely designed

packaging.

Price: Rs.1675-8,085.

Category aimed at: Couples

REGALIA: Magic in gold and unique futuristic material. Finely crafted sleek cases and

patterned dials with special appliqué flowing into intricately designed bracelets. A unique

combination of an all-gold and bicolour look, the `Regalia’ range represents the essence of dress-

wear.

Price: Rs.1725-7770

Category aimed at: Upper Middle Class – Upper Class

EDGE: The Titan EDGE is the Slimmest Watch in the Universe; a mere 3.5 millimetres thick,

the watch is practically invisible. Delicately crafted with precision, it has an incredibly Slim

Movement of 1.15 millimetres. Furthermore, the Titan Edge is Water Resistant to a depth of 30

meters, an attribute rarely ever seen in slim watches. Titan’s Edge comes with an elemental One-

Piece case made from Non-Allergic Stainless Steel, and a Sapphire Crystal that market it Scratch

Resistant.

Price: Rs. 4,500-5,200Category

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Aimed at: Business Class

NEBULA: Nebula, a range of watches crafted from solid gold embellished with precious stones,

available with both leather straps and intricately designed bracelets. With Nebula, Titan turns

watches into precious jewellery. The finishing touch to this exquisite collection is the sapphire

crystal that crowns each of the watches.

Price: 10,000-45,000

Categories aimed at: Upper Class

Tommy Hilfiger: If we talk about this brand, it is an international brand but in India it is

operated by Titan. It shows that if any customer is interested in multinational brand then Titan

can fulfil their demand in India at store which makes their goodwill not only in India but also in

foreign countries.

Price:8000-60000

Category Aimed at: Upper and Business Class

PRICING OBJECTIVES: Titan consists of watches that cater to various segments and to

various categories and so their pricing strategy is also in accordance to their products and the

features offered by them cashing in on monopoly, unique features, outstanding performance and

the name TITAN. Titan’s primary pricing objective is to kill Competition. Being an Indian

manufacture and infusing the advantages of the Indian market with the dynamics of the western

market the company has carved itself a place difficult to achieve by foreign players.

The Objective for pricing are:

SURVIVAL: In case of some of the watches titan prices them according to the features and the

value delivered by them. The exacta is a simple steel watch priced at around 600 to 1,100. This

unique combination of simplicity and good styling is to keep the brand going with its offering

being value for money.

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MARKET SHARE: In India 70% of the sales in watches come from the lower segment and hence

by pricing the sonata at 350 onwards, backing it with a TATA guarantee no one can match the

value for the price of Rs.350. Titan prices its world watches which are compared equal to an

international Player Like Calvin Klein where a customer pays about 4 times a value of the world

watch hence penetrating the market with low prices to international players to gain market share.

MARKET SKIMMING: In the Indian watch industry there is no one offering pure gold watches,

watches in pair, Jewellery watches and this concept though exists with foreign competition has

just come to India. Though foreign competition has set in to these concepts, TITAN offers these

products with the Indian touch in its designs, the products, and the looks. Hence it is able to skim

the market with certain products in these ranges.

PRODUCT QULAITY: Quality and leadership are synonymous to Titan. It seeks to achieve both

through their value for products compared to their prices.

PRICING METHOD:

MARK UP PRICING – Titan goes in for the mark up pricing strategy. The Titan product carries

a maximum retail price on it. Now shops such as the world of titan – exclusive showrooms buy

directly from the dealer and hence the element of the middleman is not there. A retailer in this

category buys the watch for 17-18% lesser than the MRP and hence he is able to get the 17%

profit margin on sales. It is up to the discretion of the retailer to offer any discount on the MRP

as it would affect what he gets in return.

In the recent past Titan has also used the PERCEIVED VALUE PRICING to its advantage. It is

managing to successfully convince the customer of the perceived value of the WORLD WATCH

using billboards and hoardings all around the city, increasing buyers image, trust worthiness,

innovation, differentiation, value for the product. The hoardings go about to say the international

presence of an Indian Watch. Titan has also in the past done so for its steel collection but using

Commercial Advertisements.

There is always a positive relationship between high prices, high quality, and a high advertising

budget. Titan too demonstrates this feature. People are willing to pay the price for the quality and

titan spends 25 crores a year on advertising its products. This is the highest spending done in the

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watch industry in India. More so ever with high value and lower prices in case of the sonata, the

product is the heart throb in the watch industry.

PROMOTIONAL PRICING:

Price Discounts and Allowances: Titan once a year comes out with a Price discount sale on the

MRP of the watches. Now this is entirely based on the stock carried by the company at the year

end. Allowances are more on the company to the retailer where the retailer gets a special

allowance if the store picks up more than a certain quantity.

Warranties and Service Contracts: Titan promotes sales by adding a free warranty or service

contract to its watches and this is backed up by the name TATA which is especially needed to

convince and march ahead in the lower segment market.

Product Line Pricing: The differences in the prices of the watches are justified by the features,

the style, and the differences which make up each watch. Titan prices all its watches in such a

way that it maximizes the total profit on the total mix.

Captive Product Pricing: There is a general buzz in the market about titan being more

expensive than the rest in terms of servicing and the parts used by TITAN. Titan watches, the

lower end ones are cheap but the straps and the battery with services is generally expensive.

Merchandising planning and visual merchandising:

Merchandise selling is the primary objective of retailing. A merchandise mix is developed that

represents the full range of products mixture that is held by a retailer to target customers. An

appropriate combination of product lines, product items and product units will determine a good

merchandise mix. This is exhibited by the variety of merchandise the retailer stocks, that shows

the number of different product lines they possess. Merchandising management depends upon

various factors. Retail atmospherics and space management will enable a retailer have good

merchandise management. Retail atmospherics comprises of exterior atmospherics, interior

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atmospherics, store layout and visual merchandising. Visual merchandising can be defined as the

display of products in order to sell the products. Visual merchandising includes various aspects

to be effective such as store floor plan, store windows, merchandise display, space design,

hardware fixtures and many more. Visual merchandising helps in educating, attracting and

informing the customer about the product/service being provided in an effective and creative

way. It makes a customer roam around the store to find novelties. It helps in building a store

image. The arrangement gives easy access to merchandise. Visual merchandising enables a

customer to make the purchase decision since it draws the attention of the customer and gives

him a clear picture. This helps the retailer in introducing new products since it becomes self

explanatory as they are displayed. From the customer point of view it gives an idea on how to

use the product. This attracts a customer to enter the shop. This technique provides a creative

medium to display the product thereby creates a long lasting impression on the customer [Bajaj,

2005, P 423] [Kotler & Keller, 2009, P 442] [Michael & Weitz, 2009, P 605].

The shoppers are affected by the atmospherics created at a store. The customer can be

displeasured if he/she did not like the atmospherics created. The customers sometimes tend to

decrease their arousal for buying a product based on factors like music played in the store. So the

retailers have to be extremely careful while creating store atmospherics. In the service

environment the interior colors of the store create great deal in the nature of mood to be created.

Some may feel dull colors or light colors are boring and depressing. At the same time bright

colors cannot be considered as lively either it may make it absurd. Largely customers’ senses,

emotions and shopping behaviour are affected due to different preference of shoppers. Visual

merchandising therefore sometimes has a negative impact on the customers. Visual

merchandising may sometimes tell too much about itself making the customer form his own

opinion towards the product. In order to avoid such things a retailer has to be very careful on the

visual display based on the product or service [Bajaj, 2005, P 405] [Michael & Weitz, 2009, P

610].

The coverage of VM can be divided into four main segments, which are:

Exterior Presentation: If we talk about Exterior Presentation, Titan is using eexterior signs,

billboards, Awnings, Window Displays. (See exhibition-1)

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Store design and layout: If we talk about store layout, it is using Angular, Geometric and Mixed floor plan (See exhibition 1)

Store Interiors: As a store theme, Titan is using music background, odour, lightning and color scheme.

Interior Display: As an interior display, Titan is using Fixtures & Hardware and Mannequins. (See exhibition-1)

Safety and health policy:

If we talk about safety and health policy at Titan Store, it has numerous rule and regulations,

instruments and policy such as whenever any new employee joins Titan, It provides 10-15 days

training and soft skills classes which help them to interact with customer in effective manner. In

the same way they have policy like It provides free insurance to its employees where it has tie-up

with its own Insurance company. They reserve 10-15% from their salaries as gratuity, funds and

allowances. Similarly it has all instruments which help them to protect its customers and

employees from any type of accident such as fire. Titan uses hidden cameras, barcode, checking

machine and instrument at gate by security guard which also protect them from any type of theft

in store.

Expansion plan:

If we talk about Titan expansion plan, The Indian market is estimated at 25 million watches a

year, with 50 per cent being sold by the organized sector. Titan is the runaway market leader,

with domestic sales of 6 million watches a year. There are 190 million watch-owning Indians;

between them they own about 210 million watches. Urban India accounts for 120 million of

these watches and 90 millions are on rural wrists. More men than women own watches in India,

and more working women than housewives own watches. It is the rural segment within this

diverse market that Titan is now looking to tap. “The key to success is getting into the rural

market on a larger scale. The company’s Sonata range is targeted at rural customers, and is part

of a strategy where the alignment of price and reliability are crucial. The rage costs between

Rs.495 and Rs.1200 has showrooms exclusively for it, and is sold mainly in small-town India.

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Titan Industries Ltd has utilized about half of its planned capex for FY09 as a slowdown in

consumer spending hurts demand, and will proceed cautiously with expansion plans for FY10.

“Our original budget for the year was about 112 crore (Rs1.12 billion), we have utilized about

half of that and The watch and jewellery retailer plans to add about 100 stores in FY10, but

would study the market carefully before launching new outlets. ” managing director Bhaskar

Bhat said.

Quality Management:

Titan is the SBU (Strategic Business Unit) of Tata. If we talk about Tata, Tata is considered as

second name of trust and truth. Since they have started their business till today they offer

qualitative products and service which make them market leader in every field of their business.

In the same way they provide trust and quality if we talk about watches segments.

RECOMMENDATIONS:

There are few areas where we would like to recommend Titan with regards to the visual merchandising aspect. The recommendations are summarized as follows:

1. Although the visual merchandising done is self explanatory the company has to

concentrate on making it easy for the customers to differentiate each series and sect of

products which will be based on various factors. We could find from the analysis that the

customers were not able not able to understand the differences.

2. Some products as being told by Head of VM for Titan are available only in metros and

cities whereas the up-country stores do not merchandise them. The concept behind this

being the high price of the models (ex: Titan Automatic series) which they feel would not

have any demand in such areas. We can see today’s trend that cars like Jaguar are

available in up-country markets due to the increasing disposable income of the customers

therefore we recommend Titan that they should consider merchandising even the high

end models in those markets.

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BIBLIOGRAPHY:

Magazine –

Images retail, Vol 8 no 3 March 2009, pg no- 43

Text books –

1. Bajaj, C. (2005). Retailing Management. New Delhi. Oxford University Press.

2. Beri, G . Marketing Research. (3rd ed). New Delhi. Tata McGraw-Hill Publishing Ltd.

3. Micheal, L. & Weitz, B. A. (2009). Retailing Management. (10th edition). New Delhi.

Tata McGraw-Hill Publishing Ltd.

4. Kotler, P. & Keller, K. L. (2009). Marketing management. (13th edition). New Delhi.

Prentice-Hall of India Pvt Ltd.

Web sites-

1. Organized retail and it growth retrieved on 18 July, 2009

www.business.mapsofindia.com/india-retail

2. Organized retail information retrieved on 18 July, 2009 www.indiaretailing.com

3. Titan industries information on background retrieved on www.titanstores.com

4. Products and stores of Titan retrieved on 20 June, 2009 www.titanworld.com

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Annexure

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Store design: Mixed floor plan

Geometric Floor Plan:

Angular Floor Plan:

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